Market Overview

Hundreds of Cannabis Strains Form an Array of Choices for Consumers

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NEW YORK, Sept. 17, 2019 /PRNewswire/ -- Innovative cannabis cultivators have created thousands of unique strains through complex breeding processes and technical growing methods. Generally, the growing process of a cannabis plant heavily determines the cannabinoid content within the strain. Cannabinoids, like tetrahydrocannabinol (THC) or cannabidiol (CBD), are a chemical substance within strains that connect to the cannabinoid receptors within the consumer's body and brain, causing a stimulating effect. To note, THC and CBD impart widely different effects because of their genetic makeup. Specifically, THC derives from the marijuana plant of the cannabis family, which is commonly known to cause mind-altering effects for its consumers. On the other hand, CBD stems from the hemp plant within the cannabis family and unlike THC, does not cause any psychoactive effects. Moreover, the growing process also determines the terpene development of cannabis plants, helping to dictate the flavor and aroma a strain gives off, similar to how an orange radiates its citrusy smell and taste. The most common terpene found in cannabis plants is myrcene, which is also found within mangoes. Myrcene is responsible for giving a strain's distinctive smell that most people acknowledge. Additionally, myrcene is known to provide several therapeutic benefits as well as anti-inflammatory properties. But perhaps most importantly, myrcene can also determine whether a strain is indica or sativa-dominant. Generally, plants that contain more than 0.5% myrcene are said to be indica. The common perception is that sativa offers consumer cerebral-altering head highs, while indica strains provide more of a body-dominant effect. However, it is difficult to consistently classify many strains as either exclusively indica or sativa because of rampant crossbreeding. For instance, many cultivators tend to crossbreed sativa and indica strains to purposely select specific cannabinoids and terpenes within each strain and create a unique, desirable mix. Breeders can mix and match between well over hundreds of different strains, creating an endless array of hybrid options. The ability to create hybrid strains from already pre-existing strains opens a whole new market for the overall cannabis industry. And as a result, the global cannabis market is projected to grow from USD 10.3 Billion in 2018 to USD 39.4 Billion by 2023 at a CAGR of 30.7%, according to data compiled by MarketsandMarkets. Pasha Brands Ltd. (OTC:CRFTF) (CSE:CRFT), Canopy Growth Corporation (NYSE:CGC) (TSX:WEED), Charlotte's Web Holdings, Inc. (OTC:CWBHF) (TSX:CWEB), Origin House (OTC:ORHOF) (CSE:OH), KushCo Holdings, Inc. (OTC:KSHB)

The initial growing process of a cannabis plant is a crucial step because it can determine the resulting potency of the strain. Most large-scale cultivators use machinery to automate their grow houses, which can boost production levels significantly. However, the major drawback is that machinery can often damage the cannabinoid content within the plants, resulting in weaker strains. Nonetheless, by using automated machinery, many large-scale cultivators are able to mass produce tons and tons of cannabis each harvest, allowing them to redistribute the cannabis at wholesale prices, which appeals mainly to an average or new consumers. On the other hand, small cultivators have engaged in cultivating "craft cannabis," which is known as the artisanal process of creating organic and premium-grade cannabis. Craft cultivators are able to achieve high-quality products because they avoid using machinery and artificial chemicals. And while machinery can automatically operate grow houses, it can also damage the cannabinoid content within plants, thus reducing the potency of the product. Moreover, artificial chemicals such as pesticides or growth stimulants can damage cannabinoid growth. As a result, craft cultivators tend to each and every individual plant to ensure a healthy growing process. And during harvest periods, craft cultivators also hand-trim each plant to maintain the cannabinoid integrity throughout the whole plant. Overall, while large-scale cultivators can produce much more than smaller cultivators, the two appeal to different consumer markets; the larger operators market towards the average consumers, while craft cultivators appeal to cannabis enthusiasts looking for a premium product. "The staggering number of marijuana strains being developed is creating a connoisseur culture that favors small-scale, artisanal farms that can nimbly adapt to shifts in market demand. Because such farms can market themselves as small, sustainable, and local, they can better reflect 21st-century food movement ideals," said Ryan Stoa, Associate Professor of Law at Concordia University School of Law. "It is probably inevitable that Big Marijuana will take hold in some form, but that doesn't mean the market can't support the small businesses that have enabled marijuana to become a uniquely local and artisanal industry."

Pasha Brands Ltd. (OTC:CRFTF) (CSE:CRFT) is also listed on the Canadian Securities Exchange under the ticker (CSE:CRFT). Yesterday, the Company announced that, "its wholly owned subsidiary, BC Craft Supply Co. Ltd ("BC Craft"), has signed a supply agreement with Canada's first licensed outdoor micro cultivator, Tamara Follett ("Tamara").

Following the announcements of supply agreements with Canada's first micro cultivation and micro processing licensees, Hearst Organic Cannabis and North 40 Cannabis (respectively) last month, the supply agreement with Tamara represents another historic milestone for both Pasha and the cannabis industry in Canada. 85 per cent of the Canadian cannabis supply is still largely sourced from illicit producers who have not embraced or been welcomed into the regulated supply chain.

"Tamara represents so much about why we created Pasha and the BC Craft platform," commented Patrick Brauckmann, Executive Chairman of Pasha. '"Far too many small businesses were passed over and forgotten when this government designed legalization. Small producers like Tamara are the heart of craft cannabis and the soul of the cannabis industry."

Based in St. Stephen, New Brunswick, Tamara received her licence from Health Canada on September 13, 2019. Under the agreement with Pasha, Tamara will supply BC Craft with her annual production, to be sold as dried flower in Canada, and through Pasha's subsidiary this product will be resold as packaged flower into the regulated supply chain in Canada.

"'m thrilled to be working with Pasha and expanding my love of growing cannabis on a larger scale," aid Tamara. "As a small business operator, I'm always looking for service providers that allow me to focus on my core competency."

With Canada's current licensed cannabis producers only able to supply an estimated 15 per cent of what Canadians are consuming, Pasha is optimistic that each micro cultivator BC Craft has in its supply chain will help correct the cannabis supply imbalance and bring exciting new products to market. Each micro cultivator in Canada will be able to produce approximately 500 kilograms of cannabis per year, while each micro processor can process up to 600 kilograms of cannabis per year. Canada has tens of thousands of craft producers operating in the illicit cannabis market and Pasha's wholly-owned subsidiary BC Craft Supply Co. is focused on helping as many small farmers transition into the regulated market as possible.

About Pasha Brands: Based in Vancouver, British Columbia, Pasha is a vertically integrated, prohibition-era brand house firmly rooted in BC's craft cannabis industry, which boasts an international reputation. With proven capabilities in cannabis cultivation, genetic research and development, product processing, and retail, Pasha is uniquely positioned in the new legal cannabis market through its network of hundreds of craft cannabis suppliers under the Pasha umbrella. Pasha subsidiary, Medcann Health Products Ltd., is a Health Canada licensed cultivator and processor with a licence to sell medical cannabis products in Canada. Pasha and BC Craft are also developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft is driven to assist craft growers in obtaining security clearance and licensing to grow as micro-cultivators, specializing in education and compliance to bring growers into the regulated cannabis supply market.

Pasha's common shares trade on the CSE under the symbol "CRFT" and on the FSE under the symbol "ZZD". For more information, please visit www.pashabrands.com"

For our latest "Buzz on the Street" Show featuring Pasha Brands Ltd. recent corporate news, please head over to: https://www.youtube.com/watch?v=mjB9iU4gNh4

Canopy Growth Corporation (NYSE:CGC) (TSX:WEED) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through Canopy Growth's subsidiary, Storz & Bickel GMbH & Co. KG. — Canopy Growth Corporation recently announced that it had received a licence from Health Canada for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. Including the Smiths Falls site and the recently licensed BC Tweed extraction site, Canopy Growth now operates three significant extraction assets to support the throughput required for large scale value-add product development. "With this milestone, we are executing against the vision of making strategic investments today in order to deliver results over the long term," said Mark Zekulin, Chief Executive Officer, Canopy Growth. "This licence will ensure we have the supply of extraction inputs for the medical, CBD, and recreational markets, especially the next generation of value-add, high margin cannabis products here in Canada."

Charlotte's Web Holdings, Inc. (OTCQX:CWBHF) (TSX:CWEB) is the market leader in the production and distribution of innovative hemp-derived cannabidiol ("CBD") wellness products. Charlotte's Web Holdings, Inc. recently unveiled its newest CBD product line - hemp extract-infused CBD Gummies – made with whole-plant extract from its prized hemp genetics and featuring synergistic functional ingredients to support specific health related functions including everyday stress, sleep, and recovery from exercise or active lifestyles. The gummies feature Charlotte's Web whole-plant hemp extract made from the Company's proprietary hemp genetics that people know and trust. Charlotte's Web extracts contain a full-spectrum of 80+ naturally occurring phytocannabinoids plus terpenes and flavonoids. In addition, the three varieties of gummies are uniquely formulated and enhanced with functional herbs and botanical supplements that work in synergy to further support a targeted wellness focus. "Gummies are a very popular edible format as a result of convenience and measurable consumption," stated Kelsey Morrison, Associate Director of Product Development at Charlotte's Web. "This new delivery format from Charlotte's Web provides an easy bite-sized way to ingest full-spectrum hemp-extract CBD."

Origin House (OTCQX:ORHOF) (CSE:OH) is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. CannaRoyalty Corp. d/b/a Origin House recently announced its financial results for the three and six-month periods ended June 30th, 2019. The following are financial highlights of Origin House's operating results for the three months ended June 30th, 2019, compared to the three months ended June 30th, 2018: Revenue was CAD 21.4 Million as compared to CAD 3.5 Million; Gross margin including gains on biological assets was CAD 4.4 Million as compared to CAD 0.8 Million; Operating expenses were CAD 23.5 Million as compared to CAD 6.3 Million; Loss from operations was CAD 19.0 Million as compared to CAD 5.5 Million. Marc Lustig, Chairman and Chief Executive Officer of Origin House commented, "I am very proud of the entire Origin House team for generating another quarter of record revenue growth, leveraging the California brand support and distribution platform we built over the past several years, to deliver results for shareholders. It speaks to the strength and maturity of our organization that we were able to increase our share of shelf in California while preparing to integrate with Cresco Labs. To that end, in this quarter, we successfully executed on the sale of Alternative Medical Enterprises LLC generating a 156% return on investment, our distribution division Continuum entered into a distribution agreement with Cresco and began distributing Cresco branded products across California, and we have made substantial progress on post-closing groundwork."

KushCo Holdings, Inc. (OTCQX:KSHB) is the premier producer of ancillary products and services to the cannabis and hemp industries. KushCo Holdings, Inc. recently announced that it had entered an exclusive distribution agreement with De La Rue, a global leader in anti-counterfeiting and authentication solutions. In accordance with the agreement, KushCo will offer the growing cannabis industry standard and custom branded anti-counterfeit security labels. The solution will also provide unique IDs to support product serialization and a digital verification system to enable authentication throughout the regulated cannabis supply chain. The regulated cannabis industry is being actively targeted by counterfeiters aiming to benefit from the industry's explosive growth. The KushCo proposition will provide companies with enhanced packaging, with the most secure visual authentication technology using 3D photopolymer images, unique serialization, e-verification, label tracking, and data capturing capabilities. "It is our responsibility as a leader in the space to build consumer trust in addition to empowering governments and brands. Counterfeit products undermine the legitimate cannabis industry by hurting sales, cheating governments out of tax revenue, and eroding consumer confidence while putting their health at risk. KushCo wants to provide the tools for our clients to have greater transparency and accountability," said Nick Kovacevich, KushCo's Chief Executive Officer.

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